California

Pacific Union Bank Stake Is Put Up for Sale

Pacific Union Bank, a Los Angeles-based institution with a largely Korean American clientele, was put up for sale this week by its majority owner, Korea Exchange Bank, the fifth-largest bank in South Korea.

Korea Exchange, which owns 62.5% of Pacific Union Bank's stock, put the shares in a trust on Monday, after Lone Star Funds, a Dallas private-equity group, completed a purchase of 51% of Korea Exchange for $1.2 billion, marking the largest foreign investment in a Korean bank.

Lone Star doesn't want to register as a bank holding company in the United States, so it plans to divest itself of the Pacific Union holdings through a sale or merger. Pacific Union said a committee of independent directors would work with L. Dale Crandall, the trustee for Korea Exchange's Pacific Union shares, in evaluating offers.

Pacific Union has about $1 billion in assets, with 12 full-service branches in Los Angeles County, Orange County, San Francisco and Santa Clara, Calif., as well as a loan-production office in Seattle.

Sandler O'Neill & Partners bank analyst Mike McMahon said he expected Pacific Union to fetch $22 to $25 a share, which would value the company at $235 million to $267 million.

Shares of Pacific Union, which traded in the $12 range last winter and spring, closed at $20.25 on Wednesday, down 59 cents, on Nasdaq.